Why In-Game Ads Are Taking Off
eMarketer recently forecast that U.S. mobile gaming ad revenues will reach $6.26 billion in 2022, up a muscular 14.0 percent from $5.49 billion in 2021. And that’s not all: robust double-digit growth is predicted to continue through 2024. What does this news mean to brands?
What eMarketer Reported
According to eMarketer, the pandemic has given mobile gaming a boost. The most popular device for gaming appears to be smartphones — good news for advertisers, as casual smartphone gamers may not feel the need to pay for ad-free platforms. Media companies have certainly taken note of the inherent opportunities in this arena: consider Netflix, which acquired mobile game studio Next Games and mobile game developer Boss Fight Entertainment. Significantly, the gaming trend appears to be staying strong: eMarketer projects that mobile gaming is poised to reach $7.87 billion in ad revenues in 2024. That’s a total of 2.5 percent of all digital ad spend. Long story short: gaming isn’t going anywhere, and marketers stand to benefit.
The Netflix Effect
It’s likely that Netflix’s deep dive into gaming will boost the in-game advertising market over the next few years. The company also stands to draft a blueprint as to how gaming can revitalize a stagnant, even suffering, brand. Netflix, under tremendous pressure to boost its revenues after reporting a disappointing first quarter of 2022, has plenty of motivation — it lost 200,000 subscribers in the first three months of this year, with a forecasted further loss of 2 million subscribers.
But gaming could help the subscription streaming service find its groove again. As reported by the Washington Post, Netflix plans to make 50 games available before year’s end, some of which may be tied in to shows. The company is hardly starting from scratch, having already dipped a toe into gaming waters by licensing intellectual property or adapting already popular games. But now it’s clear that Netflix will be leaning even harder into gaming—and all the opportunities that will subsequently come their way.
Handle with Care
As exciting as those opportunities may be, it’s important for advertisers to proceed with caution when it comes to in-game ads. As eMarketer notes, gamers are anxious about ads possibly interrupting their play. What format the ads take is part of the issue: while in-game billboards in racing or open-world games may be unobtrusive, the prospect of ads served up between game matches or, even worse, obscuring the screen mid-match, have consumers worriedly gnashing their teeth. To be fair, ads have been part of the gaming experience since gaming first became a thing. But as eMarketer points out, “ads still aren’t baked into the medium the way they are for TV, and advertisers should be mindful of players’ wishes for a non-disruptive experience.”
What Advertisers Should Do
So, what is the best way for brands to capitalize on the gaming phenom? We recommend that you:
- Know your audience. Gamers are a diverse bunch. Know their habits, know their passion points. Above all, understand what games your target audience enjoys. You’ll find moms playing games like Home Sheep Home, while 18-to-24-year-olds reliably gravitate to Fortnite. Understand the trends, and who’s where, before attempting to advertise on a gaming platform.
- Know gaming. Make sure you understand the medium. Furthermore, really understand the game itself. It’s not enough that a game is popular—or even popular with your chosen demographic. Is it a good match for your brand? A game like Doom, well liked if admittedly violent, may or may not be consistent with the messaging your brand hopes to impart.
- Know your limits—and the limits of your audience. Returning to the point made above about proceeding with caution: make sure that your ads aren’t ruining the gaming experience for your potential customers. Respecting the integrity of a game represents a win/win for gamers and marketers alike.
Contact True Interactive
Eager to learn more about the opportunities gaming—and in-game ads—can afford your brand? Contact us. We can help.